The Combined Effects of Free Cash Flow and Financial Slack on Bidder and Target Stock Returns

The Creation of Value for Shareholders in Tender Offers: An Empirical Investigation on the Italian Stock Market

“…From this point of view, the results on the one hand confirm and strengthen those obtained in a previous study (Intrisano & Rossi, 2012); on the other hand, they differ with respect to the conclusions reached by international literature on Tender Offers, which generally shows positive values, although not always statistically significant (Smith & Kim, 1994;Bradley, Desai, & Kim, 1988;Lang, Stulz, & Walkling, 1989;Berkovitch & Nerayanan, 1993).…”

“…Among the works which focus on Tender Offers, some of which are illustrated in Table 2, the results are not always converging. Many studies, in fact, seem to suggest the creation of value for the shareholders of the companies involved (Dodd & Ruback, 1977;Kummer & Hoffmeister, 1978;Bradley, 1980;Jarrell & Bradley, 1980;Bradley, Desai, & Kim, 1988;Jarrell & Poulsen, 1989;Lang, Stulz, & Walkling, 1989, Smith & Kim, 1994Bigelli & Mengoli, 1999). Fama, Fisher, Jensen, and Roll (1969) and the results refer only to Tender offers.…”

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

“…Extensive studies have illustrated that cash-financed M&As yield positive abnormal returns, whereas stock-financed M&As generate negative abnormal returns (Blackburn, Dark, & Hanson, 1997;Brown & Ryngaert, 1991;Faccio & Masulis, 2005;Mann & Kohli, 2009;Martynova & Renneboog, 2008;Smith & Kim, 1994). Information asymmetry about the true value of the acquirer's stock and the disciplinary role of debt incurred for cash financing are widely accepted as the reasons that cause this difference (Yook, 2003).…”

Interdependence between Institutional Ownership and Leverage of Free Cash Flow: The Development of Agency Theory Model in Balancing Conflict of Interest in Indonesian Company

“…This free cash flows that often become the trigger of divergence of interests between shareholders and manager. When the free cash flow available, manager allegedly going to waste the free cash flow and caused inefficiencies in the company or will invest the free cash flow with small return (Smith and Kim, 1994). White et al (2003) defines free cash flow as available discretionary to the company.…”